Navigating Malaysia's E-Invoicing Mandate: What You Need to Know for 2024 and Beyond

In the ever-evolving landscape of taxation and business operations, Malaysia is set to usher in a transformative change that will impact businesses of all sizes. As of June 2024, electronic invoicing, or e-invoicing, will take center stage in Malaysia's business landscape, starting with taxpayers having an annual turnover of MYR 100 million or more. The Inland Revenue Board of Malaysia (IRBM) is spearheading this initiative, and it's essential for businesses to prepare for this shift.

In Malaysia, a transformative change is on the horizon that will revolutionize business operations and taxation processes. Starting from June 2024, electronic invoicing, or e-invoicing, will become a focal point in Malaysia's business landscape. Led by the Inland Revenue Board of Malaysia (IRBM), this initiative will have a significant impact on businesses of all sizes. To ensure a smooth transition and compliance, businesses need to prepare for this shift in invoicing processes.

What is E-Invoicing and Who Does It Affect?

E-invoicing is a digital approach to invoicing that simplifies the creation, submission, validation, and archiving of invoices electronically. In Malaysia, the implementation of e-invoicing begins with businesses operating in the B2B realm, covering transactions such as imports and exports, starting in 2024. Subsequently, B2G (Business-to-Government) transactions will follow in 2026, and finally, it will extend to B2C (Business-to-Consumer) transactions in 2027.

The IRBM's E-Invoicing Platform:

To ensure accuracy and compliance, the IRBM has developed a centralized platform where all electronic invoices must be submitted for validation and registration. This platform aims to streamline the taxation process, making it more transparent and efficient for businesses.

How to Submit E-Invoices:

Businesses have two methods to transmit invoices to the IRBM portal:

• Manual Submission via MyInvois Portal: Businesses can manually submit their invoices through the user-friendly MyInvois portal provided by the IRBM.
• Automatic Submission via API in XML or JSON Format: For a more streamlined process, businesses can choose to submit invoices automatically via API in XML or JSON format. This approach enhances efficiency and reduces manual intervention.

Once an invoice is submitted, the IRBM will assign a unique identifier and QR code to each document as part of its validation framework. Both the sender and the recipient will receive notifications from the IRBM upon successful validation. The supplier is then responsible for delivering the validated document to the buyer through their chosen channels.

Important Dates to Remember:

The implementation of e-invoicing in Malaysia will follow a phased rollout based on annual turnover:

• June 2024: Businesses with an annual turnover of MYR 100 million or more.
• January 2025: Businesses with an annual turnover of MYR 50 million or more.
• January 2026: Businesses with an annual turnover of MYR 25 million or more.
• January 2027: All other taxpayers.

Additionally, starting in 2027, e-invoicing will extend to B2C transactions with the introduction of mandatory electronic tickets sent to the tax authority in real-time.

Benefits of E-Invoicing:

The introduction of e-invoicing promises several benefits for businesses and the economy as a whole. These benefits include:

• Compliance Assurance: Our e-invoicing solution is fully compliant with the latest regulatory requirements set by IRBM. You can trust Esker to keep you up-to-date and ensure your e-invoices are always in line with the mandated standards.
• Seamless Integration: Our solution seamlessly integrates with your existing systems, such as ERP, ensuring a smooth transition without disrupting your current operations. Once we receive the information from your ERP, we will send the information to IRBM and receive the validated information from IRBM using API integration.
• Enhanced Efficiency: Automating your invoicing processes with Esker eliminates manual errors, reduces processing time, and increases overall efficiency. Streamlining workflows allows you to focus on core business activities and drive growth.
• Real-Time Visibility: Our solution provides real-time visibility into the entire invoicing process, enabling you to track invoices, monitor payment statuses, and gain valuable insights. You can make informed business decisions and improve cash flow management with comprehensive visibility.

As Malaysia prepares for the e-invoicing revolution in 2024, businesses must equip themselves with the necessary knowledge and resources to adapt to this transformative shift. By adhering to the guidelines set by the IRBM and staying updated on key implementation dates, businesses can ensure a seamless transition to e-invoicing. Embracing e-invoicing will lead to increased efficiency, transparency, and compliance, benefiting businesses and contributing to the nation's economic growth. Stay tuned for further updates and be ready to embrace the future of invoicing in Malaysia.

Get yourselves compliant using a fuss-free solution:

Esker helps organisation adapts and complies with the technical and legal compliance of electronic invoicing in Malaysia. Our solution is made to implement your existing finance solutions without disrupting to your internal operation for sending and receiving electronic documents from all your business partners. Esker’s solution is also Pan-European Public Procurement On-Line (PEPPOL) compliant, and we are an appointed PEPPOL Access Point.

Our expertise in electronic document management and automation solutions ensures that your transition to e-invoicing is smooth and hassle-free. Interested to learn more? Contact us today!